Land-Use Regulation and the Rise in Housing Prices Amy Dain Jim - PowerPoint PPT Presentation

Land-Use Regulation and the Rise in Housing Prices Amy Dain Jim Stergios May 17, 2006

Questions that motivated the undertaking… • Do local housing regulations allow the market to meet the range of housing needs in the state? • Are current local land use regulations effective at accomplishing their intended goals? • Are municipal restrictions on housing development causing housing scarcity, and thus fueling price appreciation?

Municipalities Studied -Within 50 miles of Boston -187 municipalities -Over half of state’s 351 cities and towns

Regulations Studied Database: Answers to over 100 questions about regulations in each municipality. Sample: 187 municipalities 187 zoning bylaws/ordinances 181 subdivision regulations (road design standards) 131 wetlands bylaws/ordinances (over 2/3 of 187) 109 septic regulations (over 2/3 of 161 municipalities not 100% on sewer*) *26 municipalities 100% on sewer.

Lot Size – Single Family Lots MassGIS data (from ’99, ’00) 2-acre lots zoned in over 90% of town’s area: 8. Groton 1. Boxford 9. Paxton 2. Carlisle 10. Plympton 3. Lincoln 11. Princeton 4. Medway 12. Rehoboth 5. Berlin 13. Sutton 6. Bolton 14. Townsend 7. Dunstable Half of the municipalities (95 of 187) zone over 50% of land area for one acre lot sizes or larger. [MIT study: Median actual lot size from 1998 – 2002: .9 acre] Numerous frontage, setbacks, width, yard size and other requirements…

Lot Shape “No pork chop, rattail, excessively funnel-shaped or otherwise gerrymandered lots shall be allowed.” – Millbury Zoning Bylaw Perimeter/area ratios: (p 2 /a)/(a/r)<=X , with X ranging from 20 to 30 -6 municipalities Key p = perimeter p 2 /a<=X , with X ranging from 22 to 45 a = actual lot area r = required lot area -26 municipalities p/a<=X , with X ranging from 0.02 to 0.08 -7 municipalities Other shape requirements: Fit circle, square, rectangle, ellipsis within lot lines.

Cluster/Flexible Zoning (Open Space Preservation Design, Conservation Subdivision, PUD) 80% of municipalities have it. But only limited success. Of ¾ of municipalities that told us results of cluster zoning… - 18 said : built a lot of cluster - 16 said : no cluster built - Most said : ‘not much, a few’ -Minimum parcel size too big -Process risky and time consuming Tyngsborough’s 2004 Master Plan recommends: “Eliminate requirement that Town Meeting approve each Open Space Residential Development.” -Not enough flexibility -No additional units above conventional zoning plan “ No density bonus in ours. Why would you cluster?” – Town Planner

Multi-family Zoning No MF allowed MF only if 55+ “It may technically say 1. Bolton 1. Boxford that you can build 2. Boylston 2. Carlisle multi-family, but 3. Bridgewater 3. Lynnfield the bar is so high 4. Dighton 4. Marshfield that you can’t 5. Lakeville 5. Paxton build under it.” 6. Littleton 6. Plympton 7. Mendon 7. Wenham -Planner in town 8. Nahant 8. Hanover (townhouse only) south of Boston 9. Seekonk 9. Medway (townhouse only) 10. West Bridgewater Barriers to MF development where “allowed”: 1. Minimum parcel size 2. Dimensional requirements 3. Re-zoning often required; special permits also risky 4. MF district built-out Example: Westborough has Garden Apartment and High Rise Apartment Districts. Westborough’s Master Plan states: “Although these districts appear to provide ample alternatives to single-family housing in the Town, in reality they do not since virtually no land is zoned for multi-family housing .”

Accessory Apartments In Owner-Occupied Single-Family Homes Allowed by 60% of municipalities, but… • Over half restrict units to relatives of owner (“in-law apartments”) • Occupancy restrictions require owners to re-permit or re-certify accessory units frequently • When relatives move out, the kitchen must be removed and apartment reintegrated

Subdivision Regulations Road Width for New Neighborhoods Most common: 24 - 28 feet of pavement . 37 require 30+ feet . (20% of sample) 20 require no more than 22 feet . “You don’t want to end up with a sea of pavement.” -Planner in community south of Boston with 32-foot pavement requirement 6 feet 8 feet

Wetlands Regs: Land Subject to Flooding 2/3 of municipalities have passed wetlands bylaws/ordinances. Wetlands Protection Act protects “isolated land subject to flooding” – standing water, volume ¼ acre-foot, once per year. 59 municipalities expand definition of flooding 11: 1/8 acre-foot 2,000 sq.ft. (1/20 th of acre) 5: Dover: 1/6 acre-foot Hingham: 1/16 acre-foot Gloucester: 1/43 acre-foot Wrentham: 3/43 acre-foot Taunton: 1,000 sq.ft. surface area and 100 cubic feet volume Wayland: 500 sq.ft. surface area Swansea: 1,000 sq.ft. surface area that floods once every five years. 24: variations on “temporary inundation… that covers land not usually under water” Many lack definitions of flooding altogether, even when they indicate some increased protection for LSF (such as regulating buffers).

North Reading Zoning Bylaw Article III, Section 340-7.B “We wish to preserve the blossom of springtime, the green landscape of summer, the changing colors of fall, the snowy cover of wintertime, and the celestial display of nighttime.”

Policy paper Regulation and the Rise of Housing Prices in Greater Boston -By Ed Glaeser, Jenny Schuetz and Bryce Ward Finding: Restrictions on development of housing are causing scarcity and fueling price appreciation in the region.

Top Five Metropolitan Areas By Housing Price Appreciation OFHEO Repeat Sales Price Indices 1980-2004, CPI Adjusted 1. Nassau-Suffolk (NY) 251% 2. Boston Quincy (MA) 210% 3. Cambridge-Newton (MA) 180% 4. Essex County (MA) 179% 5. Salinas (CA) 162% Worcester County takes 9 th place. Rising housing prices mean rising demand, but ...

… High demand doesn’t have to mean high prices • In Phoenix and Las Vegas median sales prices were under $200,000 in 2004. • Boston area’s median sales price was $418,000.

When prices rise and permits fall, there’s a SUPPLY problem 35000 30000 25000 Total Permits 20000 15000 10000 5000 0 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 Year Boston-Quincy Cambridge-Newton-Framingham Essex Co. Boston MSA